T
he California housing market has shown signs of recovery in June, reversing a three-month slump in sales. However, it's essential to examine the data closely before declaring a full-blown recovery. The slight increase in sales offers a glimmer of hope for homeowners and potential buyers.
According to the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.), existing single-family home sales reached 264,260 in June, a 4% jump from May. The median home price statewide was $899,560, a tiny dip from both May and June 2024. Year-to-date home sales are up just 0.2%.
The numbers suggest that the market is stabilizing, but any stagnation in the coming months could lead to slipping behind last year's figures. Pending sales have been down for seven consecutive months, and mortgage rates continue to rise.
Key takeaways from the report include:
* Existing home sales increased by 4% in June compared to May.
* The median home price statewide was $899,560, a slight dip from both May and June 2024.
* Year-to-date home sales are up just 0.2%.
* Pending sales have been down for seven consecutive months.
Regional variations in the housing market are significant, with some areas thriving while others struggle. The Far North region saw the strongest sales growth at 13.7%, while the Central Valley experienced a slight decline. Southern California and the San Francisco Bay Area posted modest growth, indicating a more stable but not booming market.
The recent wildfires have had a devastating impact on areas like Altadena and Pacific Palisades, with home sales down significantly year-to-date and median prices plummeting.
Several factors contributed to the June rebound:
* Stabilizing prices: The slight dip in prices may be enticing some buyers who were previously priced out.
* Increased inventory: More properties are hitting the market, giving buyers more options and potentially more negotiating power.
* Pent-up demand: Many potential buyers have been waiting on the sidelines, hoping for a break. This shift in market conditions may be enough to nudge them back in.
* Slightly lower mortgage rates: The 30-year fixed-mortgage interest rate averaged 6.82% in June, a slight decrease from last year.
While we are not yet in a buyer's market, the needle is inching in that direction. Inventory is normalizing, homes are staying on the market longer, and bidding wars are becoming less intense. Buyers are finally getting a seat at the table, and instead of scrambling for scraps, they can now afford to be choosier.
I'm cautiously optimistic about the June rebound but don't think it signals the start of a sustained boom. I'll be watching closely for mortgage rates, economic trends, consumer confidence, and regional disparities before making any predictions about the second half of 2025.
Looking ahead, I expect continued price stabilization, a more balanced market, and regional disparities to continue shaping the California housing market.
